2009 (12) TMI 1015 - HC - Indian Laws

Appeal allowed, impugned order set aside. No prima facie case for injunction. Contract not enforceable.

The appeal was allowed, and the impugned order dated 24.2.2009 was set aside. The court held that the respondent had not made out a prima facie case for ... - Issues Involved:1. Maintainability of the appeal under Section 37(1)(a) of the Arbitration and Conciliation Act, 1996.2. Prima facie case for obtaining interim order of injunction.3. Specific performance of the contract.4. Enforcement of negative stipulation in the contract.5. Appointment of receiver.Issue-wise Detailed Analysis:1. Maintainability of the Appeal:The respondent contended that the appeal is not maintainable under Section 37(1)(a) of the Arbitration and Conciliation Act, 1996, as the impugned order is not an interim measure within the meaning of Section 9 of the Act. The court, however, determined that an interim order of injunction, whether passed ex parte or otherwise, falls within the ambit of Section 9 and is appealable under Section 37(1)(a). The court referred to the Full Bench decision in Akmal Ali, which held that an ex parte order of temporary injunction is appealable under Order 43, Rule 1(r) of the Code of Civil Procedure.2. Prima Facie Case for Interim Injunction:The court analyzed whether the respondent had made out a prima facie case for obtaining an interim order of injunction. It was noted that the contract between the parties involved a contingent contract, dependent on the removal of shops located outside the suit land. The court observed that the contract was inherently determinable and, therefore, not specifically enforceable under Section 14(1)(c) of the Specific Relief Act. Consequently, the court held that the respondent had not established a prima facie case for the grant of an interim injunction.3. Specific Performance of the Contract:The court examined whether the contract was specifically enforceable. It was noted that the contract involved the transfer of immovable property and the construction of a multi-purpose complex. The court found that the contract was contingent upon the removal of shops on Zoo Road, which was not within the control of the appellants. The court concluded that the contract was not specifically enforceable as it was inherently determinable and had become impossible to perform due to the non-fulfillment of the contingent condition.4. Enforcement of Negative Stipulation:The respondent argued for the enforcement of the negative stipulation in the contract, which prevented the appellants from transferring the suit land to any third party. The court held that Section 42 of the Specific Relief Act allows for the enforcement of negative stipulations only if the affirmative agreement is enforceable. Since the contract was not specifically enforceable, the court found that the negative stipulation could not be enforced. The court emphasized that granting an injunction to enforce the negative stipulation would indirectly compel specific performance of the contract, which is not permissible.5. Appointment of Receiver:The respondent sought the appointment of a receiver to manage the suit property. The court held that since the contract was not specifically performable and the disputes remained only for determining liabilities, the appointment of a receiver was not warranted. The court concluded that the application under Section 9 was misconceived and not tenable in law.Conclusion:The appeal was allowed, and the impugned order dated 24.2.2009 was set aside. The court held that the respondent had not made out a prima facie case for the grant of an interim injunction, the contract was not specifically enforceable, and the enforcement of the negative stipulation was not permissible. The application for the appointment of a receiver was also found to be unwarranted.